Collins & Aikman rises again; Amerco higher after reorganization plan is filed

By Carlise Newman

Chicago, Oct. 8- Collins & Aikman Corp. debt managed to hold on to gains Wednesday and rose further, a day after market sources said the company's president had been on a positive private call with lenders.

The Detroit auto parts supplier's paper had dropped over 10 points in three days after news that the auto parts supplier may be dropped from DaimlerChrysler AG's Chrysler Group list of contractors - although it stabilized Tuesday.

News reports said that Chrysler Group is ready to drop all current and future contracts with the auto parts supplier. Chrysler's current and planned business with Collins & Aikman is worth $1 billion, according to The Detroit Free Press, which carried the first report.

Collins & Aikman's 10¼% notes due 2006 were seen 82½ bid, 83 offered Wednesday, up 1½ points. The 11½% notes due 2006 were up 2 points to 68 bid.

On Tuesday, market sources said a private call with bank lenders gave the bonds a boost.

"I didn't expect the paper to stay up there at Tuesday's levels and I still don't think they'll sustain it. This is a huge blow," one trader said.

Elsewhere, Amerco Inc. paper firmed on Wednesday. After the close Tuesday, the Las Vegas parent of U-Haul filed its disclosure statement and reorganization with the United States Bankruptcy Court for the District of Nevada.

The plan provides full payment to creditors, without dilution of shareholder interests, in the form of cash and new notes.

Under the plan, noteholders will receive 100% recovery in the form of cash.

"With everyone getting paid back in full, you're going to see some reaction in the bonds," the trader said, adding that Amerco debt rose "a good 4 or 5 points" from the morning trade. The bonds closed at 81 bid, about 3 points higher than when they were last seen trading last week.

Under the plan, Amerco unsecured creditors, with $710 million in claims, will $143 million in cash; the SAC holding senior notes; and $200 million of new term loan B notes.

Amerco Real Estate Co. note claims, consisting of $95 million in series A senior secured notes due 2012 and $5 million series B senior secured notes due 2007, will receive $65 million in cash and $18.6 million in new term loan A notes.

Elsewhere, Adelphia Communications Corp.'s bonds rose in Wednesday's trade, one trader said.

"They've been flying off desks lately. A lot of buying and selling," he added.

The 9 7/8% notes due 2007 were quoted at 78 bid, he said, a rise of 2 points from Tuesday.

In other news, AK Steel Inc. was active Wednesday. The 7 7/8% notes due 2009 were seen at 65 bid, 66 offered, 1 point higher; while the 7¾% notes due 2012 were quoted at 64¾ bid, 66½ offered, also up a point.

"The paper has been steady to higher since the last week when they said that they're working on labor issues with the union," a trader said.

Last Friday, the United Steelworkers of America union and new management at AK Steel said they are hopeful of resolving conflicts that arose during the three-year lockout at an Ohio plant.

The union said its president, Leo Gerard, has already engaged in "detailed and productive discussions" with James Wainscott, AK Steel's acting chief executive. Under discussion are outstanding legal issues, including employees the union contends were discharged unfairly.

(Paul Deckelman contributed to this report)

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